Today corporate cash held in foreign accounts would be subject to the 35% corporate tax rate if it was transferred into U.S. accounts. These days it's not unusual for American corporations to make 50% or more of their revenue outside of the U.S. This is a good thing. Companies that haven't expanded outside the U.S. are eventually going to be overrun by their competition.
Apple had accumulated over $90 billion in cash. Good corporate governance compelled the company to disburse some of this money to share holders, reinvest in it's own stock or invest the money in growing the company. Whatever... Clearly current law stopped the majority of this cash from being put in play here in the U.S.
Apple along with Cisco, Microsoft and Oracle and others have been pushing for this overseas cash to come home with a tax holiday The fact that the Obama Administration and many members of Congress are opposed to a "tax holiday" is beside the point. The current law is bad and needs to be changed. It simply makes no sense keeping this money from coming into the U.S. economy. There's no rational reason hold this money at bay. The liberals and their "rich get richer while the poor get poorer" argument are being anything but rational. The poor are not poor because the rich are rich - they're poor because they haven't got a job. This is not a tax break for the wealthy, it's an impediment for our homegrown corporations from doing more business here. No other country does anything this counter-productive, none.
If you asked the average person on the street about this they would either be ignorant of it or believe that the government ought to stick it to these rich corporations. People getting their beliefs fed to them by media sound bites and Occupy Wall Street protest signs won't be persuaded that taxing corporations like this is a real problem. But the rest of us need to open our eyes. We can't let masked envy or the false rhetoric of fairness sway us into accepting something that is clearly wrong.
When you hear this being defended as a way to keep companies from using loopholes and special breaks to pay little or no taxes then it's time to call them on it. Year after year legislation is introduced to kill all tax loopholes, special incentives and breaks while significantly reducing corporate tax rates as a way to broaden the base, and year after year these bills go nowhere. It's not that they're bad bills or that it isn't the wise and prudent thing to do. It's that some large companies and self interested politicians like things the way they are. It's that simple.
Too often this is the case. The right thing is shoved aside because a few well connected have powerful friends in the right places. Take health care reform for example. Everyone knows that one simple change in the law would bring down the cost of health insurance overnight - and I mean everyone knows this. If the government would allow health insurance companies to sell policies across state lines the new competition would begin to drive costs down immediately. Health systems, hospitals and doctors would quickly get their cost structures in line with the new reality. We know healthy competition is good for costs and for quality. The car insurance business have never been as competitive and as affordable as it is now that these companies can sell insurance to any American, anywhere - and it is still a highly regulated business.
Yet, what we got was a top down solution that removes competition and introduces the specter of total government dictation over health care policy across the board. Yes, in theory it is still a private health care system, but without competition and diversity it might as well be a government entity once everything is a government decree.
As with the tax system, there are players in the health care business and their cronies in elective office that like things the way they are (or where they are headed) so the right thing is once again shoved aside.
I'm not saying it's like snapping your fingers and the structural problems are fixed, but a few rational and relatively simple changes would go a long way to getting things upright. It is cronyism and the special interests of the few that skew righteousness and feed the cynicism that engulfs Americans today. It doesn't have to be this way.
In a weird cosmic twist this is exactly what the Occupy Wall Street and the Tea Party protesters have been saying. One says it's the corporations and their filthy rich political cronies that are the problem and the other says it the government and their unscrupulous corporate cronies that are the problem. They're both right!!!
CW
